NZ’s small music venues are struggling – but there are ways to help them thrive

Grassroots music venues are essential to the development of new talent and audiences. But right now, those small clubs and spaces are struggling, putting Aotearoa New Zealand’s local live music sector at risk.

These venues have been likened to the local music industry’s research and development department. A bit like the success of the Black Ferns and All Blacks is built on a strong and inclusive club scene, our biggest musical exports need a place to develop and hone their craft.

In the past, investment in the development of local music was underwritten by alcohol companies, whose famous pub circuit launched the careers of many iconic artists such as Dave Dobbyn and Neil Finn.

Today’s grassroots venues, most independently owned and run, continue to invest in the sector’s growth and are intrinsic to artist career development and export pipelines. But the greatest returns on that investment are enjoyed elsewhere.

Over the past seven years, Aotearoa’s live music market has become increasingly consolidated under the ownership or control of multinational, vertically-integrated entities such as Live Nation/Ticketmaster, TEG/Ticketek and AEG/AXS.

Internationally, these companies own or control multiple elements of the live music supply chain, including venues, festivals, ticketing, artists managers and promoters.

In Aotearoa, Live Nation is the most established, recently posting record profits in Australia and New Zealand and expanding its operations by buying a controlling stake in Electric Avenue festival producer Team Event.

This is on top of substantial interests in big venues, festivals, ticketing via Ticketmaster and Moshtix, regional event organisers, and exclusive ticketing arrangements with council-owned venues in Auckland, Wellington, Rotorua, Christchurch and Dunedin.

At the same time, Live Nation’s managing director has been advocating for government investment to attract more international touring artists (some of whom have bypassed New Zealand recently).

While this investment may be one way to draw in more big international acts, the reality is that this consolidation of the live music market has tilted the market in favour of the largest players, and has eroded the viability and market share of grassroots venues.

Our recent research shows these impacts have been compounded by cost-of-living increases, urban intensification, COVID lockdowns and extreme weather events.

What other countries are doing

This situation is not unique to Aotearoa, as venues worldwide face intensified threats of closure.

Elsewhere, however, governments have recognised the importance grassroots music venues to the health of the wider industry and broader economy, and designed schemes to directly support music infrastructure from the bottom up.

In 1986, France implemented a 3.5% tax on concert tickets, payable by promoters, which is then redistributed to the local live music sector.

In Britain, the government has called for a voluntary levy of £1 per ticket on arena and stadium shows, with proceeds placed in a centralised fund to support grassroots venues (similar to NZ Rugby’s legacy fund for future participation and talent development). The UK arts minister has indicated a willingness to make this mandatory if necessary.

In March this year, an Australian parliamentary inquiry recommended a similar ticket levy on large music events to fund small venues and grassroots live music.

The Australian Live Music Business Council has argued this should be sector-to-sector, with minimal government involvement, comprising a tax-deductible co-contribution of 25 cents per ticket from the “promoter, venue, artist and punter”.

The New Zealand government’s Amplify Creative and Cultural Strategy, released last month, includes proposals to:

• leverage alternative funding sources for the sector to support sustainability

• support the growth of creative opportunities in the regions

• and improve the sustainability of key creative and cultural sector infrastructure.

A sector-to-sector funding scheme in Aotearoa, similar to the one proposed in Australia, could achieve all three of those objectives.

Instead of demonising the big players, it would provide a mechanism for the sector to collectively reinvest in grassroots infrastructure, audience development, and talent and export pipelines.

A fairer way forward

Based on our own data, audience spending on all live music tickets from June 2023 to July 2024 was approximately NZ$385 million. An across-the-board $1 per ticket contribution from all live music events over this period would have generated approximately $4.8million.

However, the average spend on international headline tickets across our sample was $145.69 – more than twice the average reported ticket spend across all live performance events.

This suggests a flat rate may see tickets from these big shows contributing proportionally much less than those at smaller venues or featuring local headliners.

By comparison, a proportional contribution of 3.5% of gross ticket sales, as with the French system, would have generated approximately $13.4 million, with the biggest events contributing a fairer share.

During the pandemic, the government worked with venues to invest in the development of new artists and audiences. This resulted in a huge increase in performance opportunities for emerging artists, as well as helping increase representation of Māori, Pacific, women and gender diverse performers.

There is a huge opportunity for a sector-to-sector funding scheme to build on and extend these gains. But if we can’t ensure grassroots venues are sustainable – and sustaining – we risk losing them for good.